Sunday, November 10, 2013

CADUSD and Crude Oil Technical Update

*Data Source: EIA

The LoonieDollar continues to follow crude oil lower after decoupling from its relationship in September. CADUSD is moving towards its ~0.9530 level but could test ~0.9450 before a possible reversal higher. CADUSD short term risk exposure remains to the downside even though we believe Crude Oil is reaching oversold conditions and might attempt a directional change. Examining the correlation relationship, a move higher in Crude Oil should support a CADUSD move higher. However, Crude is likely to outpace the Loonie in the event of a reversal to the upside.

Technical Outlook: Initial focus is Short LoonieDollar Long Crude Oil.

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